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Does Firm Size Matter for the Financial Constraints?

Jurnal Ekonomi Malaysia

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Title Does Firm Size Matter for the Financial Constraints?
 
Creator Ismail, Mohd Adib
H. Ibrahim, Mansor
Yusoff, Mohammed
Zainal, Mohd-Pisal
 
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Description ABSTRACTThis article empirically investigates the presence of  inancial constraints in the Malaysian capital market. Theexistence of financial constraints gives firm less access to external funds to finance their investment activities. Therefore, the constrained firm has to rely on internal sources of financing. The severity of financial constraints is relatively different according to firm size. Hence, the sample is divided into large and small firm subsamples. Using the Q model of investment, the results show that financial constraints are present in the Malaysian market using the full sample. The subsample results however show that large firms are not financially constrained. On the other hand, the smaller firms are facing the constraints in their investment decisions.Keywords: financial constraints; investment; cash flow; Q-model; GMM.ABSTRAKArtikel ini bertujuan mengkaji secara empirikal kewujudan kekangan kewangan dalam pasaran modal di Malaysia.Kewujudan kekangan kewangan menghadkan firma mendapat akses terhadap dana luar bagi membiayai aktiviti pelaburan mereka. Oleh kerana itu, firma berkenaan perlu bergantung kepada sumber pembiayaan dalaman. Kesan kekangan kewangan secara relatifnya adalah bebeza mengikut saiz firma. Oleh yang demikian, sampel dibahagikan kepada dua subsampel, iaitu firma besar dan firma kecil. Melalui model pelaburan Q, hasil kajian menunjukkan bahawa wujud kekangan kewangan dalam pasaran di Malaysia berdasarkan sampel keseluruhan. Namun begitu, keputusan bagi subsampel menunjukkan bahawa syarikat besar tidak mengalami kekangan kewangan. Sebaliknya, syarikat kecil menghadapi kekangan kewangan dalam keputusan pelaburan mereka.Keywords: kekangan kewangan; pelaburan; aliran tunai; model-Q; GMM.
 
Publisher Universiti Kebangsaan Malaysia
 
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Date 2012-02-19
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
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Format application/pdf
 
Identifier http://ejournal.ukm.my/jem/article/view/1328
 
Source Jurnal Ekonomi Malaysia; Vol 44 (2010): Jurnal Ekonomi Malaysia
0126-1962
 
Language eng
 
Relation http://ejournal.ukm.my/jem/article/view/1328/1194
 
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